Walmart unveils new sustainable packaging priorities

Walmart's new Sustainable Packaging Playbook outlines three new priorities.

Optimize Design. Source Sustainably. Support Recycling. With these three clear goals, Walmart hopes to reignite the passion around sustainable packaging with vendors, store buyers, packaging suppliers and consumers.

Laura Phillips, svp sustainability, kicked off the 2016 Walmart Sustainable Packaging Summit yesterday, Oct. 25, with the message that sustainable packaging is still a priority for the retail giant (watch the first hour of the event here). Presentations during the half-day event revealed Walmart’s three updated sustainable packaging goals and measurements outlined in the new Walmart Sustainable Packaging Playbook.

The Playbook gives brand-owner vendors, private-label manufacturers and packaging suppliers guidance on what they can do to make progress in each area to help improve their sustainability index score and reduce their cost of goods. The Playbook also includes links to additional resources and Walmart partners, such as the Sustainable Packaging Coalition (SPC) and the Assn of Plastic Recyclers (APR), both of whom provided expert input for the guide.

Two key pieces of news (in my opinion) delivered at the event were:

1. As part of the Support Recycling pillar, Walmart will soon start rolling out the How2Recycle label on select Great Value and Equate products at Walmart and Sam’s Club stores.

Walmart discovered that two-thirds of people don’t recycle empty packages if instructions aren’t printed on the package. It’s why Jack Pestello, svp, Private Brands, Walmart U.S., said in a press release, “We believe a best practice is to use labeling that helps customers recycle, such as the How2Recycle label, to communicate the recyclability of a package.”

How did Walmart decide which products to add the label to first? Ashley Hall, senior manager, sustainability—consumables and health-and-wellness, answers, “Both Walmart and Sam’s Club private brands suppliers are now working on incorporating the How2Recycle label. It is a rolling program. We expect that any of our sustainability work be part of any refreshes or new products, but it is not designed to dead-stop, slow down, hinder the work that we do every day. As new products are coming to market, as a package is being refreshed, we are encouraging our private-label suppliers to use consumer-friendly recycling labels like How2Recycle.

“I can tell you…it’s been a smooth process so far. We’ve seen a lot of great products getting through at fast speeds and then getting implemented at our design program,” Hall says.

2. As part of the Optimize Design pillar, Walmart will be asking for more flute options and thinner liner board in retail-ready corrugated packaging, which have been shown to boost overall compression strength, save material and reduce damage. Such options already exist in Europe, where retail-ready packaging is more mature. Walmart would like to see those innovations brought to North America.

Insider insight

For additional insights into developments discussed at the 2016 Walmart Sustainable Packaging Summit, Packaging Digest spoke with Ron Sasine, an outsider with unique “insider” insight. Sasine is principal of Hudson Windsor, a boutique consultancy focused on packaging strategy and execution for consumer retail products. Prior to founding the firm, he served as Walmart’s senior director of packaging from 2009 to 2015, where he was responsible for packaging design, execution and sourcing for the company’s largest global brands.

How will Walmart’s new focus reinvigorate sustainable packaging for the retailer, its vendors (brand owners), packaging suppliers and consumers?

Sasine: Walmart is returning to some of the fundamentals of sustainable packaging that it embraced 10 years ago when it began its sustainability journey. Like lots of issues in business, going back to tried and true principles is critical to ensuring ongoing success. The newly announced drive to optimize, recycle and source packaging sustainably is an important restatement of the fundamentals that drove success during the first phase.

Laura Phillips, svp sustainability, said it best when she talked about “reigniting packaging sustainability at Walmart” with this new emphasis. It will be up to Walmart to fully engage its buyers in executing these new packaging programs, it will be up to their suppliers to innovate and find new solutions to old problems, and it will be up to packaging manufacturers to gain better insight into retail distribution, logistics and operations so their packaging can satisfy the demands placed upon it.

Why is it necessary for Walmart to draw attention once again to packaging sustainability?

Sasine: [Yesterday’s] meeting was an important step in focusing on the challenges of sustainable packaging and gathering together the folks who can drive progress. When Walmart achieved its significant reductions in greenhouse gas impact in 2012, some suppliers and merchants might have assumed that the packaging work was done. In fact, there is a great deal still to be accomplished in reducing resource utilization, improving shipping efficiency and building a compelling economic model for sustainable packaging.

By reigniting this effort, Walmart can place a stake in the ground and require its supply chain partners to up their game.

What do you think of the three areas of focus? Appropriate? Exciting? Challenging?

Sasine: The three focus areas—packaging optimization, increased recycling, and sustainable sourcing—are concepts that are well understood by packaging manufacturers. They are the fundamentals that drive our business. The exciting part about Walmart’s restatement and focus on these areas will come as consumer products manufacturers and Walmart merchants capture the vision to execute more directly in these key areas and turn to packaging companies for their help in innovating, creating and delivering these results.

You asked a couple of times during the event about buyer involvement. What do you think the impact of the Sustainable Packaging Playbook will be on Walmart buyers?

Sasine: Walmart and Sam’s Club merchants are faced with a number of important issues in each of the categories they manage, and the Sustainable Packaging Playbook can serve as a tool for them to guide their suppliers in the same way they require performance in other areas, such as on-time delivery, pricing and product innovation. Packaging companies should take these concepts from the Playbook and create a means for communicating their progress to the buyers in their key categories. Packaging companies need to know how to extend their messaging so that it reaches the right audiences in Bentonville.

What do you think of Walmart’s support of the How2Recycle label?

Sasine: Walmart has taken a wise approach to rolling out the H2R label as a rolling change to its private-brand items. An immediate cut-over would require excessive cost and potentially drive product losses, so moving in a measured way allows adoption over time and will minimize set-up costs for suppliers.

Use of the H2R label will help consumers as they grow familiar with it and it becomes a standard across the consumer products industry.

I was surprised we didn’t hear more about sustainable packaging as it relates to ecommerce. Ashley Hall told me the guidance in the Playbook doesn’t specifically itemize ecommerce packaging, but “the fundamentals in the Playbook relate to all packaging, including ecommerce.” What do you think Walmart can/should do to show leadership in this area?

Sasine: Ecommerce packaging and conventional retail packaging are growing more similar, and the growth in ecommerce that is a linchpin of Walmart’s strategy should accelerate that process. Manufacturers are increasingly seeking to harmonize their ecommerce and conventional retail packaging, and the multi-channel distribution environment in which these companies operate will require this approach in the future.